Post Scandal Reflects The Murdoch Method

On the remarkable videotape that shows Jared Paul Stern allegedly trying to shake down California billionaire Ronald Burkle, the New York Post gossip writer explains succinctly to his prospective client how his world works. If you make “friends” with the powerful gossips who operate Page Six by paying them or their loved ones, then your future will include fewer bad items and more good items.

“It’s a little bit like the Mafia,” says Mr. Stern on the soundtrack, echoing a similar remark made last year by a fired Page Six reporter.

Such preening babble lacks subtlety but still points toward a significant truth. Whether the Post is as corruptible as the Stern tape sensationally suggests or not, there can be no doubt that proprietor Rupert Murdoch has long used the News Corporation’s assets to reward his friends and punish his enemies. His company isn’t a criminal enterprise, but he has often skirted the appearance of sleaze and worse. So any wayward tough guys who have worked for him may only be emulating the godfather’s dubious example.

To comprehend Mr. Murdoch’s unsavory stewardship of his media empire, it is worth looking back to the earliest years following his arrival in the United States. From the very beginning, he shamelessly abused the Post’s pages to promote politicians he liked and denigrate those he didn’t, as he still does today with all his news outlets.

The first inkling of something even worse came during the late winter of 1980.

Jimmy Carter, the incumbent President challenged by the insurgent liberal candidacy of Senator Edward Kennedy, badly needed to win the critical Democratic primary in New York. Mr. Murdoch, owner of Ansett Airlines, a troubled Australian aviation company, badly needed a cheap government loan to buy new planes from Boeing.

On Feb. 19, 1980, Mr. Murdoch visited Washington, D.C., to meet with the chairman of the U.S. Export-Import Bank, a federal agency that loans money to finance foreign purchases of American products. (That was well before the Australian-born press lord sought U.S. citizenship so that he could legally buy up American broadcasting properties.) After pleading his case for corporate welfare, he went to the White House for lunch with Mr. Carter.

Three days later, on Feb. 22, the Post endorsed the Democratic President on the front page (a decision abruptly rescinded in the fall when the paper rudely dumped Mr. Carter and backed Ronald Reagan.) And six days after that endorsement appeared, the Ex-Im Bank approved a $290 million loan to Ansett Airlines on easy terms.

That happy series of coincidences soon drew the attention of the Senate Banking Committee, where Mr. Murdoch and other witnesses swore that the loan had nothing to do with the endorsement. The Post publisher conceded that the circumstances could be “misconstrued,” however, and said he would avoid such mistakes in the future.

It was a touching vow, made with the same sincerity as a promise by Tony Soprano to quit loan-sharking.

A long list of prominent politicians have benefited from the largesse of the Murdoch empire since that embarrassing day so long ago. In the world capitals where the Post endorsement doesn’t mean much, and where Mr. Murdoch seeks tax breaks, regulatory favors and broadcasting licenses, the media mogul can bestow other reciprocal rewards. Over the years, his companies have handed out lucrative book contracts to such political eminences as Margaret Thatcher, Newt Gingrich, Mikhail and Raisa Gorbachev (for separate his-and-hers memoirs), and Boris Yeltsin.

The Thatcher government coddled him by overlooking potential regulatory restrictions on two of News Corp.’s most important acquisitions, The Times of Londonin 1981 and the Sky satellite network in 1990. Exemptions from the Monopolies Act and the Broadcasting Act were worth far, far more than the few million pounds advanced to the Iron Lady for her memoirs.

Within weeks after Mr. Gingrich’s Republicans won control of Congress in 1994, he met with Mr. Murdoch in the Capitol. And not long after that, the new Speaker’s literary agent had an offer of $4.5 million from HarperCollins, the News Corp. publishing subsidiary, for a two-book contract.

Bad as that episode smelled, a worse fragrance has wafted from the Murdoch enterprise in China, where he won broadcasting privileges from the corrupt Communist regime. For a reported advance of $1 million, News Corp. published the stunningly awful hagiography of party boss Deng Xiaoping, authored by daughter Deng Rong. Meanwhile, Mr. Murdoch tried to suppress a critical book on China by the renowned British diplomat Christopher Patten.

Whatever may result from the F.B.I.’s investigation of the “Page Fix” affair, this scandal will at least bring renewed scrutiny to the appalling journalistic standards and practices of the Murdoch media. Their influence both at home and abroad should renew the debate over whether democracy can survive such concentrated private control of news, opinion and entertainment—especially if the management tends to operate “a little like the Mafia.”